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White-collar crime was first defined in the year 1939, by a sociologist and most influential criminologist of the 20th century, Edwin Hardin Sutherland, as “crimes committed by people who enjoy the high social status, great repute, and respectability in their occupation”. Associated with the corporate sector, white-collar crimes are defined as non-violent crimes, generally committed by businessmen and government professionals. White-collar crime is on the rise in India, posing a threat to the country’s economic growth.These crimes require prompt intervention by the government by not only making stringent laws but also ensuring their effective implementation.
As the name suggests, white-collar crimes are those crimes that are committed by people occupying a respectable position within a company. White-collar crime embraces a variety of nonviolent crimes usually committed in commercial situations for monetary gain. The concept of white-collar crime is definitely not a new phenomenon. There have numerous references to such crimes since the Vedic period in India’s ancient and medieval literature. Manu who is often accorded the title of being India’s great law-giver, held the view it was age when dharma prevailed in perfection but later adharma progressed gradually which naturally gave way to tendencies such as robbery, wrongdoing and fraud. According to the changing dynamics of white-collar crime in India, the Central Bureau of Investigation (CBI) has found a total of 6,533 cases of corruption over the last 10 years, of which 517 cases have been recorded over the last two years. Statistics showed a trading value of 4,000 crores using fake or duplicate PAN cards. With 999 cases registered, Maharashtra saw a dramatic increase in the number of online cases. The study also said that approximately 3.2 million people have lost their card details, which were stolen from the Bank ATMs. In the light of such staggering numbers, it is safe to say India is well within the grip of White Collar Crimes.
Some examples of White collar crime
When a person belonging to higher social status resorts to blackmailing it is reckoned in white-collar crime. Blackmailing amounts to Criminal Intimidation which is elucidated under section 503 of the Indian Penal Code,1860. It signifies making a monetary demand or any other consideration by the imposition of a threat to cause any physical injury or harm, or damage to person or property, or to accuse one of a crime, or to expose somebody’s secret.
In consonance with the Oxford Advanced Learner’s Dictionary, corruption implies illegal or dishonest behaviour, particularly of people having authority. Corruption, forbidden by law, is an act or intent of a person to procure wrongful gain which is contrary to duty and the rights of others.
An extremely popular and common type of white-collar crime in India, bribery denotes giving money or any type of goods to persons who are at a higher position in the society for some favour in return.
Bank frauds and Scams
Fraud can be defined as a crime committed with the intent to deceive a person and gain undue advantage from it. Bank fraud is considered as corporate as well as a white-collar crime. It is fraud committed by companies or persons to manipulate negotiable instruments such as cheque bouncing, securities and bank deposits.
Money laundering can be defined as the act of moving illegally earned money to make it seem to have been earned legally. Money laundering is the illegal process of making huge amount of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source.
Tax evasion is the illegal activity whereby a person or an entity deliberately conceals their income in order to avoid payment of actual tax liability. This concealment of income is done with an aim to hide the money obtained from illegal means. The result at the end is less income received by the government from taxpayers.
Various other white-collar crimes include Telemarketing scams, Forgery, Counterfeiting, Insurance and healthcare fraud, Hawala Trading, Ponzi Scheme etc.
Legislations against white collar crimes in India
The government has made various legislation for identifying white-collar crime, which enumerates punishment regarding these crimes, a few of which have been mentioned hereunder:
- The Prevention of Corruption (Amendment) Act,2018
- Prevention of money laundering Act, 2002.
- Income Tax Act, 1961
- Companies Act, 2013
- Negotiable Instrument Act,1881.
- Indian Penal Code, 1860.
- Commodities Act, 1955.
- IT Act, 2005.
- Imports and Exports (Control) Act, 1950.
- Fugitive Economic Offenders Act, 2018
Fastest growing white collar crime
The concept of a global village became a reality in the twentieth century, as digital technology linked and intertwined the world’s economies, societies, and populations. India is no exception, with over 400 million internet users in 2018, making it the world’s second-largest internet market. While increased internet access promises large-scale development, it also exposes our digital communities to new vulnerabilities. Cybercrime has no boundaries and advances at the same rate as new technology. The advent in technology has resulted in an exponential spike in one form of white collar crime known as cybercrime. Since there is little chance of being caught or apprehended, cybercrime is on the rise. Over time, India’s ranking on Transparency International’s corruption perception index (CPI) has risen.
India was ranked 85th in 2014, but improved to 76th in 2015 as a result of several steps to curb white collar crime. According to a report published by The Economic Times, India was ranked 78th out of 180 countries in 2018, an increase of three places from 2017.
According to a 2017 survey, Indian customers have lost over 18 billion dollars as a result of cybercrime. In 2018, over 27 thousand cases of cybercrime were registered in the world, reflecting a 121 percent increase over the number of cases just two years prior. Although crimes range from minor online scams to lottery scams to sexual assault, the banking and finance sector tends to be the most targeted. Even so, it’s important to bear in mind that cyber security flaws aren’t confined to the private sector. Government data has been the target of some of the most dangerous data breaches. Aadhaar, India’s unique citizen identification scheme, was hacked in early 2018, revealing detailed personal information including bank details, address, and biometrics of over a billion Indians. Along with financial losses, cybercrime has a negative effect on public safety, especially for minors and marginalised members of society, as a result of cyberbullying and exploitation. Over two thousand cases of cyber crimes related to sexual assault and over 700 cases of cyber bullying against women and minors were registered in India in 2018. Perhaps the high number of cases raised awareness about the problem of cyberbullying, and a significant portion of Indians claimed that the blame for abusive conduct on social media was shared by both users and social media sites. However, one of the most significant obstacles to combating cybercrime has been a lack of awareness about cyber hygiene, which has resulted in crucial digital vulnerabilities. In India, the majority of cybercrime incidents go unreported. Even when crimes were reported to police, the infrastructure and processes for dealing with them were inadequate. On the plus side, the Indian government unveiled its National Cyber Crime Reporting Platform in 2018, enabling people to file complaints online. Cyber cells in different cities around the country have been educating police and government workers about how to deal with digital security incidents while also raising public awareness.
According to data from the National Crime Record Bureau, digital India could have been a soft target for criminals, as the country saw a 63.5 percent rise in cybercrime cases in 2019.
According to the NCRB’s numbers, 4,4546 cases of cybercrime were reported in 2019, compared to 28,248 in 2018. The data indicated that registered fraud was the motive in 60.4 per cent of cases, followed by sexual harassment (5.1 per cent) and causing public shaming (5.1 percent) (4.2 percent ). Karnataka (12,020) had the most cybercrime cases, followed by Uttar Pradesh (11,416), Maharashtra (4,967), Telangana (2,691), and Assam (2,691). (2,231). Delhi alone accounted for 78 per cent of cybercrime in the Union Territories. According to the results, a total of 18,372 cases were reported in metropolitan cities, an increase of 81.9 per cent. According to the report, most cases (13,814) were filed under computer-related offences (section 66 of IT Act )
When India is moving steadily up the growth scale, enforcement agencies such as the Central Investigative Agency (CBI), Serious Fraud Investigation Office (SFIO), Enforcement Directorate (ED), Income Tax (IT), Department of Vigilance DFS of Ministry of Finance, SEBI, RBI and IRDA are duly motivated to improve their capabilities to meet the challenges of the changing scenario though reactive in nature. These agencies, which serve as the government’s eyes and ears in the battle against white-collar crime, are working to strengthen their personnel, technological skills, and the kickstart of their operations. They either thinking or some have already of the way forward to cope with the rise in white-collar crimes to defend the greater economic interest of various investors.
A recent growth in the investigation process of white-collar crimes in India is visible. Owing to the increase in the anti-corruption marches, the companies are encountering a surge in internal investigation that act as a watchdog against any reprehensible activity and prevents the company from raids. India lacks a strict procedure to be followed while conducting these internal investigations relating to the white-collar crimes. “White-collar crimes are more dangerous to the society than ordinary crimes as they involve much higher financial losses and inflict public morale.”
White-collar crime, in particular, has risen significantly. As a developing country, India has struggled to direct its economy toward development as a result of these crimes. The investigating officials are in dire need of training where they could acquire the skill to trace these criminals, tracking of whom is otherwise difficult and complicated job. Further, the government needs implement stricter laws that act as a deterrent and reduce the commission of such crimes. Further, an improved system for speedy disposal of present cases is the need of the hour, the want of which will result in people completely losing their faith in the system, in view of the fact that these crimes are committed by people who are perceived as a role model for the society. The media has a vital role to play in diminishing the rate of white-collar crimes. If the media becomes more involved in publishing higher-level frauds and scams and disclosing how people in higher positions in an organisation use their influence arbitrarily, as well as making attempts to inform people about white-collar crimes and how to prevent unethical practises, this would certainly help to decrease the rate at which white-collar crimes are committed.